The Selar row shows how Nigeria plans to tax its creator economy

On July 15, Douglas Kendyson, the founder and chief executive of creator economy startup Selar, accused the Lagos State Internal Revenue Service (LIRS) of “hounding” his company over a backdated 5% royalty fee on all sales processed through the platform.

In an emailed statement to TechCabal, LIRS said its position rests on how those transactions are structured: when someone buys an ebook or a course on Selar, they are paying to access a creator’s copyrighted work.

Payment “may constitute consideration for the use of, or the right to use, the creator’s intellectual property,” the agency said in the statement signed by Monsurat Amasa-Oyelude, its head of corporate communications.

LIRS is testing whether payments for digital content are royalties rather than sales, a distinction that could require creator platforms to withhold 5% before paying creators.

“Where royalty is paid to an individual, resident or non-resident, the applicable withholding tax rate under the WHT Regulations is 5%,” the statement read.